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GlobeScan Dialogue: Recognizing Leaders | Guilherme Leal, Natura

One of the founders of Brazilian cosmetics company Natura, Guilherme Leal is one of the most influential businessmen in the world when it comes to sustainable development. He participates in all relevant international forums, whether at the United Nations, academic institutions or private-sector initiatives such as The B Team. In recent years, he has realized the vision of elevating Natura from a leading company in cosmetics and sustainability in Latin America – as our Sustainability Leaders research points out – to a global leader with the acquisitions of the Australian company Aesop in 2013 and Britain’s The Body Shop last year. GlobeScan’s Director in Brazil, Álvaro Almeida, spoke with Guilherme Leal about how he is planning to promote a new business culture through Natura &Co.

Natura is close to celebrating its 50th anniversary and has become a global group. To what extent has purpose contributed to its success?

Natura was created with the idea of being a different type of company, from how it understands cosmetics through its relations with society and the environment. It was throughout this process of finding ways to deliver on these commitments that Natura has become such a strong brand. What makes this company unique is its broader commitment to sustainability, with its chain of relationships. It is not just a company focused on its shareholders, who by the way have achieved exceptional results over nearly 50 years. I am absolutely sure that this stance brings us closer to the best results.

What makes Natura an innovative company?

We were innovative when we created some differentiated products using sustainably sourced ingredients with characteristics of Brazilian biodiversity, but the true innovation was born long before that. It was born from the purpose of the company, from the understanding of what beauty is in people’s lives. This is much more innovative than releasing a dozen versions of a product. When we forget our essence, we begin to do more of the same thing, and as a result our differentiation diminishes, which reduces our competitiveness. This is not just a consensus within Natura, it is my belief. When you expand the needs that you would like to meet, there is huge space for innovation. If you understand that you have to meet the needs of your consumers and their context, because you can’t live without water, without air or in a sea of ​​plastic, then it’s not worth having a solution to wash your hair to perfection if it spoils the environment in which we live. In that case, I’m giving and taking back at the same time. It is difficult for many business executives to understand this concept because they are oriented to think in a much more focused and less comprehensive way.

What is your expectation about the future impact of Natura &Co?

I do not feel comfortable with mega-organizations. I do not think they are the most efficient or the most pleasant places to work. They have to deal with challenges on a global scale, while at the same time they need to connect with local needs and the uniqueness of communities. While consolidation tends to reduce operating costs, there is also another trend toward what is less massive and more local. This is the real trend.

How should companies act within this context?

I understand that companies must be part of another corporate culture, another way of visualizing the world and their commitment to it, without which we will all be lost. We need to be more creative in designing a global governance that addresses systemic issues. That is why networking is essential. I have always dreamed of being part of a group of companies driven by purpose, able to take the benefits of competitiveness and to achieve an amplified performance, helping to face themes on a larger scale but without losing its capability to interact with real life, which happens in neighborhoods and communities. You can’t lose that connection, because that’s where the sap of life is. At the same time, we need to be able to organize these business systems that allow us to act in a way that the challenge demands.

Are these business networks already available?

I think there are still modest attempts, such as B Corporations, which we are part of, but these are still not very relevant in the global context. The year 2015 was important for us to move forward on a common agenda with the launch of the Sustainable Development Goals (SDGs). The SDGs will not move forward if they depend only on contributions from countries, since the scale of transformation depends on a shift in resource allocation on a planetary scale. Their success requires productive activity in the mainstream, not alternative efforts.

What should we expect, then, from Natura &Co?

Natura is back on track. In 2010, we reflected on our vision for the future by 2030, and a long-term strategic path was clearly identified: we should expand geographically, but without becoming a mega, bureaucratic and uncreative company, moving against our own vocation. We want to create a set of companies, each with its own identity and territorial reach that can be interconnected, producing economic and social well-being and restoring the environment of which we are a part. This was our thinking at the time. However, we did not implant this vision immediately and we took another direction for some years. We were on the path to become a large, aging corporation.

When did Natura resume that strategic vision?

We got back on track with the acquisition of Aesop, from which we knew how to welcome, preserve and encourage the development of a company aligned with us on purpose, and that was unique in its way of operating. Now, the acquisition of The Body Shop last year is also a part of this movement and it does not end there. When I first learned about the footprint of The Body Shop in 69 countries, I realized that we made a significant breakthrough in our network. We can magnify our impact tremendously. This exchange of learning has real and immense potential. I think we are headed in the right direction and we have many other steps to take, insofar as we are discovering other models of organization. I believe that we renewed our commitment to be, in fact, innovative. There is a lot of work needed to turn this vision into a successful business, but I also very much believe in the potential we have at Natura &Co. We doubled the bet after almost 50 years of our journey. Will it work? I don’t know. Life is movement, and time will tell.

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